CONSUMER EQUILIBRIUM 1
CONSUMER EQILIBRIUM
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CONSUMER EQUILIBRIUM 2
CONSUMER EQUILIBRIUM
Consumer equilibrium is said to be in equilibrium when consumer gets maximum satisfaction
with his limited money in hand at available price of goods in the market. The concept of
consumer equilibrium can be better understood by consumer utility approach.
All that is required to analyze consumer behavior is to suppose that each individual is trying
to maximize his satisfaction from consumption of goods and services that measure the
satisfaction level is known as consumer’s utility (krugman, 2008)
Consumer will choose the quantity of goods or different combination of goods
depends on utility that consumer drives from consuming the goods, this depicts consumer
behavior of choosing the goods and services. There are two laws explained by Marshall
regarding consumer behavior. First is law of diminishing marginal utility and second is law
